5 ms·

As somebody who has some insight into the inner thoughts of the revenue departments of newspapers, the suits running newspapers would rather die than accept Spo

As somebody who has some insight into the inner thoughts of the revenue departments of newspapers, the suits running newspapers would rather die than accept Spotify for newspaper. We were offering something like $0.20 per article. We ran a small scale test. The users loved it, it allowed the newspapers to monetize users that would otherwise not pay, it let you read the article without a bunch of ads loading slowing down the page. We thought this is great, we're making the digital newspaper experience better and making them more money, this is a wonderful success. They noticed that our product was loved too much by the user that they were cancelling their subscriptions in favor of it. They would rather have that guaranteed $1/month from a subset of their users than rely the unpredictability of hoping the user reads 5 articles a month. And it wasn't just one newspaper, half the top newspapers 15 by circulation said the same thing. Throw in an aggregator service like Spotify on top so the newspapers can't even control the look and feel on top? The idea's dead in the water.

jordanpower 9y ago
Mmmmm. Kind of. That insight is pretty accurate, in my experience (I work for PressReader, disclaimer) and what we're building is basically the Spotify for News. But for real. It took some doing, and we definitely had resistance at first, but we have more than 7,000 newspapers and magazines now. And more every week. Where we've really found success is taking the time to build strong relationships with the publishers. I totally get that they don't want a Spotify-like service to eat at their regular subscribers. So - part of our benefit to them, is the way we let big brands buy access for their customers. That way, newspapers can reach hotel guests, airline passengers, people like that, that they couldn't before. Whatever product you build, you have to consider BOTH the reader and the publishers.
- kenhwang 9y ago
  It depends on the scale, really. When you only account for a small % of traffic, your impact to subscription revenue is also small, to the point where they can just bucket any cost or revenue loss under the marketing budget. We still integrated with many of them (for years now at this point), with quarterly meetings with their senior management. They limit our integration to some small % of their traffic, undesirable articles, low flight risk users, or low loyalty users. We're letting them control their revenue risks, and they're all just slow, risk-adverse, engineering resource limited, and enjoying the high Trump brought back to the press.
craftyguy 9y ago
> the suits running newspapers would rather die than accept Spotify for newspaper Then let them eat cake.
cornholio 9y ago
Clearly, a subscription of a few dollars a month is MUCH more valuable that aggregated article hits to the same total value: a subscriber is someone who will return because he chose you from the alternatives, he has a sunk cost in the subscription and will keep consuming, building familiarity and brand loyalty, develop favorite columns and writers, bookmarks and homepages etc. All these will make him return in the future and extend the subscription as long as you don't screw up in a major way. A pay-per-article viewer is a mercenary that will come back only for a viral or exclusive content. These could be quite profitable when they happen, but are highly unpredictable thus have lower present value. Maybe the correct approach to this market is via the lower value, ad supported content, where publishers would gladly accept a few cents instead of displaying the ads. Ad blockers seem uniquely positioned to bootstrap this business, the publishers are deeply aware of the ad blockers to the point they modify their sites to detect them - an API to accept the micropayment instead of nagging the user to turn off the blocker would be golden. Once the system is in place and develops large revenue streams, the owners of premium content should grudgingly fold and accept pay-per-article.
- kenhwang 9y ago
  Funny you mention adblocker. You'd think it's the biggest concern for publishers, but they're not scared of what they don't know. News publishers don't exactly have nimble cutting edge engineering departments dedicated to min/maxing advertising revenue. Adblockers also block many general purpose analytics scripts that would inform the publisher that the adblocker is a threat. Very few publishers are willing to implement a hard paywall that could only be passed via confirmed payment. Especially when it relies on some 3rd party integration working. When there's a chance that that micropayment API doesn't work, no one thinks it's the payers fault, the blame always lies with the publisher in the user's eye, even when it's almost always the payer's fault. And there's nothing worse than pissing off a paying user. And hard paywalls require engineering investment, which newspapers tend to not have. It's practically effortless pushing static content up to a CDN with some ad serving scripts. It's a lot of work accepting micropayments on every request.

jordanpower 9y ago

Mmmmm. Kind of. That insight is pretty accurate, in my experience (I work for PressReader, disclaimer) and what we're building is basically the Spotify for News. But for real. It took some doing, and we definitely had resistance at first, but we have more than 7,000 newspapers and magazines now. And more every week. Where we've really found success is taking the time to build strong relationships with the publishers. I totally get that they don't want a Spotify-like service to eat at their regular subscribers. So - part of our benefit to them, is the way we let big brands buy access for their customers. That way, newspapers can reach hotel guests, airline passengers, people like that, that they couldn't before. Whatever product you build, you have to consider BOTH the reader and the publishers.

kenhwang 9y ago
It depends on the scale, really. When you only account for a small % of traffic, your impact to subscription revenue is also small, to the point where they can just bucket any cost or revenue loss under the marketing budget. We still integrated with many of them (for years now at this point), with quarterly meetings with their senior management. They limit our integration to some small % of their traffic, undesirable articles, low flight risk users, or low loyalty users. We're letting them control their revenue risks, and they're all just slow, risk-adverse, engineering resource limited, and enjoying the high Trump brought back to the press.

craftyguy 9y ago

> the suits running newspapers would rather die than accept Spotify for newspaper Then let them eat cake.

cornholio 9y ago

Clearly, a subscription of a few dollars a month is MUCH more valuable that aggregated article hits to the same total value: a subscriber is someone who will return because he chose you from the alternatives, he has a sunk cost in the subscription and will keep consuming, building familiarity and brand loyalty, develop favorite columns and writers, bookmarks and homepages etc. All these will make him return in the future and extend the subscription as long as you don't screw up in a major way. A pay-per-article viewer is a mercenary that will come back only for a viral or exclusive content. These could be quite profitable when they happen, but are highly unpredictable thus have lower present value. Maybe the correct approach to this market is via the lower value, ad supported content, where publishers would gladly accept a few cents instead of displaying the ads. Ad blockers seem uniquely positioned to bootstrap this business, the publishers are deeply aware of the ad blockers to the point they modify their sites to detect them - an API to accept the micropayment instead of nagging the user to turn off the blocker would be golden. Once the system is in place and develops large revenue streams, the owners of premium content should grudgingly fold and accept pay-per-article.

kenhwang 9y ago
Funny you mention adblocker. You'd think it's the biggest concern for publishers, but they're not scared of what they don't know. News publishers don't exactly have nimble cutting edge engineering departments dedicated to min/maxing advertising revenue. Adblockers also block many general purpose analytics scripts that would inform the publisher that the adblocker is a threat. Very few publishers are willing to implement a hard paywall that could only be passed via confirmed payment. Especially when it relies on some 3rd party integration working. When there's a chance that that micropayment API doesn't work, no one thinks it's the payers fault, the blame always lies with the publisher in the user's eye, even when it's almost always the payer's fault. And there's nothing worse than pissing off a paying user. And hard paywalls require engineering investment, which newspapers tend to not have. It's practically effortless pushing static content up to a CDN with some ad serving scripts. It's a lot of work accepting micropayments on every request.